Against the backdrop of weak consumption, high-end consumer goods are not easy to sell.
Recently, some media reported that the "miracle medicine" Pien Tze Huang lozenge, which was once fried to 1,000 yuan a pill, could not be sold, and its performance in this year's recycling market was relatively poor.
According to the Financial Associated Press, a recycler said, "The market is not good this year, and Pien Tze Huang (lozenges) fell by nearly 100 yuan within a year." ”
It is reported that the situation is similar to that of Pien Tze Huang, as well as Angong Niuhuang Pill, which also uses bezoar as the main raw material.
The "miracle medicine", which was once hard to find, walked down the altar en masse. What is the deep-seated reason behind it?
In fact, the answer is very simple, it is weak consumption.
As we all know, like high-end liquor such as Moutai, Pien Tze Huang's performance growth is mainly based on the logic of price increases.
Since 2018, a wave of consumption upgrading has swept the consumer market, and almost all consumer companies at that time are soaring in the capital market. Typically, the market value of soy sauce sellers has surpassed that of the largest real estate developers, Nongfu Spring has become the richest man in China, and Moutai has become the largest company in the A-share market......
In this context, some traditional pharmaceutical companies have also stood on the outlet, the most representative of which is Pien Tze Huang, which is known as "medicine grass".
According to the data of the Southwest Securities Research Report, from 2004 to 2023, the price of Pien Tze Huang products has been raised about 20 times, and the retail price has risen from the initial 325 yuan/tablet to 760 yuan/tablet in May 2023. The price that has risen year after year has become the basis for Pien Tze Huang's performance to rise.
Entering 2024, because of the weakness of consumption, the logic of rising prices of consumer goods has begun to waver, and even the retail price of Feitian Moutai has begun to "break" one after another.
Affected by this, Kweichow Moutai's share price began to decline at an accelerated pace, so Kweichow Moutai threw out a 6 billion repurchase plan in order to maintain the stability of the stock price. According to statistics, if calculated from the highest level, Pien Tze Huang's share price has fallen by more than 50%, and its market value has evaporated by more than 157.7 billion. If you count it from the beginning of the year, it has fallen by 5.96%.
At present, Pien Tze Huang's dynamic P/E ratio is still as high as 39.49 times, and in the current market environment, after the price increase logic does not work, how to digest the valuation is still a difficult problem for Pien Tze Huang. We believe that Pien Tze Huang is still on the expensive side, and its price-to-earnings ratio is much higher than the industry average of 20.91 times.
"Medicine Mao" fell into a bottleneck period
In addition to clinical medication, Pien Tze Huang is often used for daily health care and gift-giving.
Therefore, Pien Tze Huang, which has social attributes, has always been in a very tight state, and in this context, the price of Pien Tze Huang has also risen all the way on the basis of limited editions.
According to the Blue Whale News report, in June 2021, the hype of Pien Tze Huang entered the most ferocious stage, and the price of a single pill of Pien Tze Huang lozenges, which was originally priced at 590 yuan, was once increased by the "scalpers" on the market to 900 yuan to 1600 yuan, and there was a rush to buy in many places, so that the product was out of stock for several months.
In this context, Pien Tze Huang's performance skyrocketed.
The financial report shows that in 2021, Pien Tze Huang's revenue will reach 8 billion yuan, and the non-net profit will exceed 2.4 billion yuan, a year-on-year increase of more than 50%. It was also this year that the "myth" of Pien Tze Huang resounded in the capital market, and the stock price once exceeded 480 yuan per share, and the market value exceeded 290 billion.
With the blessing of performance and the ultra-high prosperity of the industry, Pien Tze Huang was pushed to the altar.
But after entering 2022, the growth rate of Pien Tze Huang's revenue and net profit began to slow down, and the market began to vote with its feet, and Pien Tze Huang's stock price began to fall all the way.
In 2023, Pien Tze Huang's revenue will exceed 10 billion, hitting a record high, but the capital market has not given positive feedback, and in the whole year of 2023, Pien Tze Huang's decline will exceed 15%.
After entering 2024, Pien Tze Huang's share price has fallen again, and in the context of the upward trend of the Chinese medicine industry, the feedback from the market has actually explained the problem.
In mid-August, Pien Tze Huang released its 2024 interim performance report, which showed that the revenue in the first half of the year was 5.65 billion yuan, a year-on-year increase of 12%; net profit was 1.722 billion yuan, a year-on-year increase of 11.73%; deducted non-net profit of 1.75 billion yuan, an increase of 11.03% year-on-year. It is worth noting that looking at the second quarter alone, its revenue growth rate was only 2.7%, which is the worst second-quarter report delivered by Pien Tze Huang in the past five years.
In the face of the slowdown in performance growth, Pien Tze Huang said that the rise in the cost of important raw materials has compressed profit margins. According to the Economic Observer, the price of Pien Tze Huang's purchase of natural bezoars in the market in mid-August was 1.7 million yuan/kg, which was about double the price a year ago. Superimposed on the basic situation of the current consumer market, the price increase space of Pien Tze Huang will be smaller and smaller in the future.
Under the double blow of this kind of raw material price rise and smaller and smaller price increase space, the bottleneck period of "Yao Mao" Pien Tze Huang has also appeared. How to break the situation is still the number one problem for the company.
Can't afford the price?
In fact, in order to get rid of the dependence on product price increases, Pien Tze Huang has put forward the development strategy of "one core and two wings" since 2014. That is, with Pien Tze Huang as the core, expand the market of cosmetics, daily chemicals and health care products.
However, from the current point of view, the effect of Pien Tze Huang's "one core and two wings" is not ideal, and its core product revenue still accounts for the absolute majority, which also leads to Pien Tze Huang's dependence on the price increase of core products.
It is worth noting that after entering 2024, with the weakness of the consumer market, the high-end consumer market has been greatly squeezed, which has led to a significant decline in the second-hand recycling price of Pien Tze Huang.
According to the Financial Associated Press, since June this year, the second-hand recycling market of Pien Tze Huang has fallen significantly, and the current price of Pien Tze Huang on the new date is about 550 yuan/tablet, and the recycling price of Pien Tze Huang lozenges has dropped to 400 yuan/tablet.
On September 24, the Red Star Capital Bureau also inquired about recyclers in many places, and the reply was that the recycling price of Pien Tze Huang on the latest date is 500 yuan/spindle, and if the recovered Pien Tze Huang is before 2024, the price is even lower, about 460 yuan/spindle. A recycler from Inner Mongolia said that the minimum recycling price has now dropped to 400 yuan per ingot.
Some recyclers said that it has fallen too much now, and it is falling at any time this year.
In the face of falling recycling prices, some recyclers believe that the current market is too saturated and there are too many goods on the market. There are also recyclers who believe that the recycling price of high-priced gifts is falling, and there are not many people buying them.
Kanjian Finance believes that if the second-hand recycling price of Pien Tze Huang continues to fall, it may have a certain impact on the terminal price of the product, and Pien Tze Huang's performance will continue to be under pressure. Not only that, but Pien Tze Huang's price-earnings ratio is still high, and if the price rise is blocked, then how to digest the valuation in the future is also a difficult problem.
After the release of Pien Tze Huang's financial report, Wanlian Securities released a research report saying that the company's core single products and cosmetics revenue achieved double-digit growth respectively, but the rising cost of raw materials dragged down the gross profit margin. Therefore, the company's "buy" rating is maintained.
Soochow Securities issued a research report saying that the company's performance was under pressure in the short term, but its online profitability improved. According to the research report, as of the first half of 2024, "Pien Tze Huang lozenges" ranked first in the sales volume of hepatobiliary drugs on Tmall and Jingdong platforms; In 2024, "Longjiang Brand Compound Pien Tze Huang Liver Treasure" won the "No. 1 Hong Kong Pharmaceutical Brand List" and "No. 2 Overseas Pharmaceutical Brand List" on the 618 Jingdong platform. In terms of offline channel layout, on the basis of covering nearly 400 Pien Tze Huang Chinese Medicine Halls across the country, it has helped to implement the "Famous Doctors in Zhang" project, scientifically laid out the Famous Doctor Hall (Traditional Chinese Medicine Hall) and Pien Tze Huang Chinese Medicine Hall, and enriched Pien Tze Huang's terminal sales outlets. Through its wholly-owned subsidiary, Fujian Pien Tze Huang Health Technology Co., Ltd., it has established a full-category strategic cooperative relationship with a number of well-known chains, covering more than 100,000 terminal stores. In 2024H1, the company increased offline terminal sales and achieved revenue of 5.386 billion yuan.
However, considering the impact of rising raw materials on profits, the company's net profit forecast was lowered, but the company's "buy" rating was maintained.